SAP Financial Supply Chain Management
Financial Supply Chain Management (FSCM) in simple terms means managing demand and supply of cash/cash equivalents. SAP has come out with SAP FSCM functionality or suite of applications to manage this more effectively and efficiently thus helping companies to manage the costs associated with this process better. In this posting we will look at what are the features and functionalists available in SAP FSCM and how it can be leveraged better for the benefit of business.
Key business areas where SAP FSCM functionalists can be leveraged are input for more efficient working capital management, receivables management and cost management of payments. SAP FSCM functionalities are enabled by SAP Netweaver technology to enhance the reach and better integration – both within and outside the organization applications as well as integrated within SAP ERP Financials.
SAP Financials is broadly organized in 4 broad functionality areas to support all financial management processes as well as integration with other business processes:
Financial and Management Accounting
Financial Supply Chain Management
Treasury and Risk Management
Prior to ECC 5.0 most of the functionality supporting business processes related to claims, dispute, and credit management were handled outside SAP application using legacy systems or handled manually. Integration with the Account receivable and cash management was more of a manual activity in most of the cases.
With ECC 5.0 SAP introduced SAP Financial Supply Chain Management (FSCM). Key objective is to bring business processes on the receivables and collection side within SAP solution thus providing more value. It helps in tying all the loose ends around receivables, collections and cash management within the organization thus leading to better integration and last step connect with the customers.
As with other SAP products this has also evolved over a period of time. Initially Cash and Treasury Management were also part of FSCM due to close integration needs but today they are part of Treasury functionality. Though some of the functionalities were available in previous versions but benefits were limited. Most of the other functional areas are well established and mature from functionality perspective while FSCM is a new functionality with very limited knowledge and implementation experience available in the market
Some of the key benefits SAP FSCM brings in are:
Last step integration with customers and vendors with minimal infrastructure requirements from customer or vendor side thus leading to higher adoption rate
Reduction in manual activities, communication and co-ordination efforts thus leading to reduction in overall cost of managing and doing activities in the receivables related process areas
Usage of business partners across multiple functionalities provide more flexibility as well as streamline the m data maintenance across the landscape
Information available almost in real time to better manage the working capital and receivables thus reducing the cost associated with it
What are the benefits of SAP FSCM?
The process improvement that can be achieved can be broken down into a number of different streams.
- Process efficiency and controls can be seen within the Credit Collection teams and other associated teams.
- The Collection worklist ensures the correct customer is called at the right timewithin the Collection process. This will enable more customers to be called, as the volume of effort to record a customer contact is simplified into a single transaction.
- Logging disputes removes manual offline processes, and reducing the time spent to log and process disputes will directly improve the cash collection process leading to more cash being received in a quicker time frame.
- The new version of Credit Management provides more accurate credit data using internal and external data, reducing the potential risk for bad debts.
Hope the above features meet your requirement.
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